Autonomous cars and mobility services will alter the OEM/consumer relationship

Publish date:

The automotive industry is lagging in digital transformation, and companies need to step up their digital investments to offer meaningful returns to customers and partners.

The automotive industry is lagging in its digital transformation journey; it remains quite heavily industrialized and will require time to transform. But with increasing pressure and time to go green running out, the industry cannot delay in making strong digital investments that will show a meaningful return to customers and partners any longer.

With one foot in the present and the other in the future of tomorrow, automotive is investing in green. Tasked with the challenge of stimulating e-car sales, 2019 will mark a shift in the industry between agile innovators and laggards. Meanwhile, consumers are not purchasing e-cars in the numbers forecasted, or at a rate that the industry and governments need to meet sustainability goals.

In this blog, I look at digital transformation and e-car consumer adoption, plus findings from our recent reports: Digital Mastery in Automotive, Cars Online trends study, and some observations from CES 2019 in Las Vegas.

The consumer knowledge share

In 2018 consumers felt inadequately informed about the electric car industry. Over the next year, automakers are going to tackle the challenge of educating consumers about the most important aspects of e-cars that they don’t understand – vehicle batteries and charging equipment. This lack of education has been a cause for concern, industry players in the know are aware that the resultant reinforcement of misgivings such as range anxiety, can be the cause for consumers losing interest in electric and switching back to ICE cars.

A key priority for original equipment manufacturers (OEMs) will be addressing the lack of information consumers are reporting to ensure that individuals with an interest in e-cars are not put off at an early stage. Since many consumers want to inform themselves independently before contacting a retailer, self-service and interactive tools are important. 2019 will mark a shift in the industry’s engagement and education point with the consumer.

The technology enabled experience will augment the e-car buying process

Within the next 12 months, leaders in the industry will borrow learnings from other sectors to champion the consumer experience in the e-car buying cycle. As AI (Artificial Intelligence) and IoT (Internet of Things) technology are now reaching maturity, automakers will consider how they can be leveraged to help drive sales.

Nearly half of consumers (47%) say they prefer a mix of human and AI interactions when purchasing high-consideration products, while 36% of consumers say their current car does not have connected car services which they would like in their next car.

With brand heritage and driving experience losing their value to digital features and autonomous cars, this is set to play a very important role, especially in post-purchase decision making, particularly in the premium segment. 2019 will define the leaders from the laggards in the automotive space – those who can and can’t cater to the needs of instantaneous customer service

Retail will be better equipped

For mobility or automotive companies, the challenge of tomorrow is green. OEMs will be tasked with enabling dealers to sell e-cars over the coming years. Requiring both parties to confront the reality that selling e-cars takes longer, not least because of the amount of information and reassurance that consumers require.

Partnership formation between OEMs and dealers will be a key theme of the coming year, they will need to work together to ensure that dealers are equipped and incentivized to create the necessary enthusiasm and commitment for selling e-cars. After all, retailers will need to have a good reason to sell e-cars rather than other items in their inventory. They also need convenient ways to help consumers find all the information they need to make a purchase decision.

Automotive will champion in-car experience

As we edge closer to the fully-fledged autonomous experience (level 5), auto-manufacturers will need to augment the way we experience travel, yet this will be a gradual process. Mobility as a service opens up a huge opportunity for commerce, uncovering new and lucrative ways to target consumers who will be more accessible if they no longer need to focus on driving.

At CES earlier this month, Audi unveiled its partnership with Disney to create VR in-car entertainment designed to immerse passengers into a VR-based video game. Meanwhile, Hyundai’s virtual touch displayed a gesture-based system allowing passengers and drivers to interact with a virtual screen projected onto the vehicle’s windshield. Within the next year, we should expect on-demand services, media content partnerships, and smart home connectivity to evolve, but this is really just the beginning.

Automakers will need to set themselves apart in the market and appeal to consumers by creating unique in-car experiences and services. For instance, the “real-time emotion adaptive driving” from Kia unveiled at CES scans passengers in the car to detect heart rate and facial experience to provide a customized driving experience that reflects the passenger’s mood.

Autonomous drives future mobility

As perceptions around mobility continue to shift, we must expect disruption in the market. For example, LIDAR sensors are getting smaller and AI is getting smarter. Over the next 12 months, we’ll see increased investment across automotive as the sector fully realizes the potential for new revenue models in mobility for both consumer and shipment needs.

AI is going to continue to evolve and impact how automotive companies function and manufacture, from reduced development time to increased customer engagement by unlocking and optimizing user data. It will be critical for vendors to shift their focus beyond the vehicle component, and even beyond mobility to unleash new revenue models in a new digital setting.

We will see investment in digital culture

To surpass traditional silos and help stimulate quicker decision-making processes, the automotive industry will begin investing in a digital culture. Over six out of ten automotive respondents (63%), including employees, managers, and leadership, say that culture is their top hurdle to digital transformation. The same research also reveals a strong disconnect between leadership and the workforce when it comes to understanding what digital culture means.

At present, fewer than 30% of automotive organizations have a digital unit or coordinate digital initiatives across silos, conversely, nearly 70% of digital masters (across all industries) have a digital unit. As automotive thinks digital in the new year, there will be an upsurge in leaders across the sector, prioritizing a digital shift – an online “center of excellence” can help set direction and share learnings, for example.

The formation of open innovation platforms will drive digital services

With the very nature of how mobility is set to change in the coming years, digital natives – such as Google, Apple and the Chinese technology company, Alibaba– understand that while autonomous cars might give them an entry point to the sector, digital platforms, along with apps and services, will establish their long-term staying power.

The Automotive industry is catching on, in 2019 automotive pioneers will begin to utilize a standardized and open digital platform for third-party contributors and partners, so that an automotive organization can increase innovation capacity significantly. Only 29% of automotive firms have launched new businesses based on digital technologies.

To learn more Contact Us.

*Originally published on IoTNow.

Related Posts

Application Services

Driving automotive forward in the new normal

Date icon April 14, 2022

How increasing the softwarization of your business can pave the way for enhanced customer...


Leadership in the era of automotive sustainability

Date icon April 11, 2022

Over the last decade we’ve witnessed a seismic shift in the way automotive firms approach the...


Substance or style: predicting the future of automotive innovation

Date icon March 30, 2022

First from the blog series – Driving the innovation journey together. This blog speaks...